MEMORANDUM

KENAI PENINSULA BOROUGH

FINANCE DEPARTMENT

To: Timothy Navarre, Assembly President

Members, Kenai Borough Assembly

Thru: Dale Bagley, Mayor

From: Jeffrey Sinz, Finance Director

Rob Robson,

Date: November 8, 2001

Subject: Ordinance 2001-19-24, Accepting and Appropriating School Capital Grant Funds

The attached ordinance accepts and appropriates grant funds awarded by the State of Alaska, Department of Education and Early Development for three school capital maintenance projects. The grant funding was authorized by the state legislature through the passage of SB29. The specific projects and amount of grant funding are as follows: $171,500 for the McNeil Canyon septic system project, $278,275 for the Seward Middle School gym reroof project, and $385,610 for the Kenai High School insulation project. Acceptance of the grant funding requires a 30 percent local match. In addition to providing funding for new projects, the grant funds may be used to reimburse the borough for projects previously funded through local sources and completed within the last three years.

The McNeil Canyon project was previously funded at $250,000 by the borough. It is nearing completion so the grant funds will be used to reimburse the borough general fund for costs already incurred. A portion of the previously approved local funding will be used to meet the requirement for a local match.

The Seward Middle School project was previously funded in the amount of $595,000 by the borough. This project is currently moving forward, but an additional $140,000 will be necessary to complete the project. Therefore, $138,275 of the available grant funding will be used to reimburse the general fund for costs previously incurred and the remaining $140,000 in grant funding will be appropriated to increase the total project funding. A portion of the previously approved local funding will be used to meet the requirement for a local match.

The Kenai Central High School insulation project is new. It was originally scheduled to be funded with bond proceeds from last year's $7,429,000 general obligation school bond sale. With the concurrence of the Department of Education and Early Development, it was determined to be administratively more expedient to fund this project with grant proceeds and redirect the bond proceeds to another high priority project. The total project cost is estimated at $550,871. The ordinance accepts and appropriates grant funds of $385,610. It also appropriates local matching funds of $165,261 from the borough general fund.

Hearing on a shortened basis is requested to enable project planning to occur in time for the Kenai High School insulation project to be completed during the 2002 summer construction season.